A Reuters Poll of 88 Economists Sees the Deposit Rate at 2.00% Through 2027 as the Euro‑Zone’s Inflation Hovers Near Target and Growth Holds Steady

The European Central Bank (ECB) appears set to hold its key deposit rate at 2.00% for the foreseeable future, potentially until 2027, according to the latest Reuters poll of 88 economists. With inflation in the euro‑zone steady around the 2% target and economic growth remaining modest but resilient, the ECB is signalling the end of its recent rate‑cutting cycle and entering a phase of maintenance.

A Pause, Not a Pivot
According to the poll, all respondents expect no change to the deposit rate at the ECB’s next meeting on 30 October, and over half believe the rate will remain unchanged through the end of 2026. The median projection even sees the rate staying firm into 2027. Inflation in September edged up slightly to around 2.2% from 2.0% in August, yet remains firmly within the ECB’s target band — reinforcing the view that the bank’s current policy stance is “sufficiently robust” to absorb potential shocks. On the growth front, the euro‑zone economy is forecast to expand by approximately 1.2% in 2025, 1.1% in 2026, and 1.4% in 2027, underpinning the case for stability rather than fresh stimulus.

Why Now?
The shift toward a sustained hold on rates reflects several converging factors:

• Inflation near target: After years of elevated inflation, the euro‑zone has seen price pressures moderate to the vicinity of the ECB’s 2% goal. This lessens the urgency for further cuts or hikes.
• Growth steady but unspectacular: While not booming, the economy’s baseline strength means that monetary policy need not be adjusted aggressively. Fiscal support (notably from Germany) is helping.
• End of the cutting cycle: In previous months the ECB had trimmed its deposit rate by 200 basis points between June 2024 and June 2025. Some economists now believe that campaign is over.
• Downside risks persist: The outlook remains tilted to the downside—political instability, weaker‑than‑expected stimulus impact, and global trade pressures could all derail prospects, meaning the ECB’s “wait and see” approach is prudent.

Market and Policy Implications
For markets and policymakers, the message from the ECB is clear: the era of frequent rate changes is likely behind us. Investors should adjust to a policy environment of “steady as she goes.”

• Bond & equity markets: With rate cuts off the near‑term table, yields may remain anchored and volatility in fixed income could rise if inflation or growth data surprise.
• Banks & lending: A prolonged period at 2.00% means credit conditions remain moderate; banks must manage margins under broadly stable rates.
• Monetary policy messaging: The ECB retains optionality but clearly signals no rush into further reductions. Policymakers emphasise data‑dependence rather than a predetermined path.
• Fiscal interplay: With monetary policy on hold, the role of fiscal policy (especially infrastructure and stimulus in Germany, France, Italy) becomes more significant for boosting growth.
• Global divergence: Contrasting with the Federal Reserve in the U.S., which faces a weaker labour market and may cut rates, the euro‑zone central bank is leaning toward stability, which could influence currency dynamics and capital flows.

Risks to Watch
Despite the optimistic baseline, several caveats remain:

• Unexpected inflation rebound: Energy prices, supply‑chain disruptions or wage‑push inflation could force the ECB to reconsider its stance.
• Growth disappointments: If fiscal stimulus in major economies such as Germany is delayed or ineffective, growth may undershoot expectations, placing pressure on the ECB.
• External shocks: Trade conflicts, a resurgence of the euro’s strength, or geopolitical events could upset the equilibrium. Indeed, some policymakers at the bank caution the outlook is not set in stone.
• Policy complacency danger: Staying too passive for too long could raise the risk that the central bank is “behind the curve” if conditions shift.

The Takeaway
As of late October 2025, the ECB is signalling a prolonged stand‑still in its deposit rate at 2.00%. The economics behind the decision are straightforward: inflation is roughly on target, growth is steady, and risks are manageable. The bank appears comfortable in letting the current policy sit and assessing how the picture evolves rather than attempting another active manoeuvre.

For households, businesses and investors across the euro‑zone, this translates into a period of relative monetary calm: borrowing costs should remain stable, interest‑rate driven surprises are unlikely, and the spotlight shifts increasingly to fiscal policy, structural reforms and global economic developments.

However, the “pause” should not be mistaken for inaction in perpetuity. The ECB remains alert to evolving data and retains the flexibility to act if inflation deviates or growth falters. The coming months will test whether the bank’s confidence in its baseline holds up — or whether fresh turbulence demands a policy reset.